Credit Delinquencies Down Since January

[K-in-Boston]

Experian reports that delinquencies across pretty much all credit products are down since the pandemic hit.  An interesting tidbit given all of the "sky is falling" reports and the recent slashing and closing of revolving accounts.

https://www.experian.com/blogs/ask-experian/research/consumer-delinquencies-slow-during-pandemic/

[Brian_Earl_Spilner]

You can't default on accounts lenders shut down! 😈

[Andypanda]

How much is due to CARES act protection?

[SH3L8Y]

That's really interesting. I guess those who received stimulus checks or the extra unemployment funds used them to pay down debts? 

[ccquest]

Also harder to be delinquent when the creditors are being accommodating or accounts are in temporary forbearance. Either way, at least this means the lenders are aware and things aren't coming as a surprise when it happens.

[Anonymous]

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@K-in-Boston wrote:

Experian reports that delinquencies across pretty much all credit products are down since the pandemic hit.  An interesting tidbit given all of the "sky is falling" reports and the recent slashing and closing of revolving accounts.

https://www.experian.com/blogs/ask-experian/research/consumer-delinquencies-slow-during-pandemic/

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I like how you provide evidence against all the 'sky is falling' talk. Like you did with those ridiculous articles headlined, "70 million people just had their credit card limits cut or accounts closed", based on an internet survey of a thousand people. That's still spreading, too.

Experian lists all the caveats at the end, under "Delinquencies May Rise as Pandemic Aid Expires". Still a lot of great unknowns out there. I wonder how much and for how long consumer behavior will be changed by this crisis.

[sammydavidjr]

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@SH3L8Y wrote:

That's really interesting. I guess those who received stimulus checks or the extra unemployment funds used them to pay down debts? 

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Early research shows that most people  spent their stimulus checks on housing related costs: anything from rent to a new TV set or utility bill.

My guess would be that delinquencies are down primarily because of forbearance. The $600 (now $300) federal unemployment benefit enhancement also helped.

Delinquencies will probably shoot up when time runs out on lender clemency and federal benefits.

[M_Smart007]

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@sammydavidjr wrote:

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"Delinquencies will probably shoot up when time runs out on lender clemency and federal benefits."

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I was wondering this myself. I like to remain hopeful, but then there is reality.

[sammydavidjr]

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@M_Smart007 wrote:

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@sammydavidjr wrote:

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"Delinquencies will probably shoot up when time runs out on lender clemency and federal benefits."

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I was wondering this myself. I like to remain hopeful, but then there is reality.

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The thing about forbearance is that it ends up (temporarily) bailing out those who would have defaulted even if there had been no pandemic. Those are all coming back for sure -- all at once -- when forbearance and government aid run out. There will probably be a spike in defaults caused by these deferred delinquencies. What happens later is the question: a fast economic recovery could quickly bring defaults back under control after that physiological spike -- if recovery is slow...

[Anonymous]

Funny that Experian has findings that appear to be on a different path than other news providers?

One sure could wonder? I know I do?